Xbox Not ‘Core’ Business Part, Says Microsoft CEO

Speaking at Fortune’s Brainstorm Tech, the CEO of Microsoft Satya Nadella cleared any confusions regarding the ‘core’ business of Microsoft by saying that Xbox is not considered Microsoft’s core product.

“Xbox isn’t that far from [the core]. We can do a few more things than the core. But the point is, you’ve got to have a culture to do it.

I want us to be comfortable to be proud of Xbox, to give it the air cover of Microsoft but at the same time not confuse it with our core.”

So what exactly does Microsft consider it’s core services, the CEO said

“More recently, we have described ourselves as a “devices and services” company. While the devices and services description was helpful in starting our transformation, we now need to hone in on our unique strategy.

At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.”

In short, Microsoft will be more focused on its Software and Enterprise solutions than its gaming console, and this is not expected to change anytime soon.

“We are good at productivity and platforms—but rethink it. That’s not a side project, that is the very company itself.

Until we really change culturally, no renewal happens.”

This attitude might be further strengthened by a report in Bloomberg stating that Microsoft is expected to announce a restructuring plan to overlap the divisions with Nokia and it appears that is set to cut many jobs, with the Xbox Marketing Team taking a huge hit.

However, there is nothing to worry about (in the short term atleast) because Nadella recognizes the importance of Xbox division, but he doesn’t consider it a core part, as evident from the internal letter sent to employees earlier this week.

“As a large company, I think it’s critical to define the core, but it’s important to make smart choices on other businesses in which we can have fundamental impact and success. The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming.

…… Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft.”